Is Gen AI Bad For Sales?
Is Gen AI Bad For Sales?
On hyper commoditization of AI-enabled cold outreach and the future of sales
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"Generative AI is ruining my outbound response rates!"
I was puzzled when I heard this complaint from a private equity friend in charge of deal origination (sourcing) at his firm. Shouldn't AI tools supercharge sourcing workflows? He went on to explain that response rates to his carefully crafted, personalized cold outreach emails had plummeted 40-50% in just the last 6 months. Worse yet, whenever he did get through to a prospect, he was often the 3rd or 4th investor to reach out that same week!
My friend brought up a non-obvious insight - GenAI made it 10x easier to draft and send thousands of “personalized” cold outbounds at scale - for everyone at once - rendering cold outbound marketing less and less effective. The exact opposite of what GenAI was meant to accomplish!
In this post, I wanted to explore this paradox and offer some thoughts on what it might mean for the future of sales.
When alpha becomes beta
The two primary ways in which Gen AI can supercharge sales workflows are:
Sourcing - LLMs give web-crawlers and alt data miners superpowers by enabling them to ingest, process, and analyze a lot more unstructured data than before
Outreach - LLMs can ingest a bunch of disparate data sources (LinkedIn, blog posts, company website, and even the sender’s personal profile) and craft a hyper-personalized cold email for each prospect- at scale.
This is a salesperson's dream come true, right? Not only do you get a substantially wider top of funnel (more leads identified), but you also get dramatically higher response rates given the personalized outreach (instead of generic templates). Gen AI eliminates the drudgery of digging for prospect leads while making outreach personal and relevant. It is no wonder that many salespeople are rushing to employ these tactics before their competitors.
But herein lies the paradox…
As this technology begins to proliferate, prospects are increasingly inundated with "personalized" cold emails. They are quickly growing weary of what increasingly appears to be spam, causing the response rates to plummet as recipients disengage from the onslaught of AI-generated outreach. Personalization is becoming commoditized. What was once an effective way to grab attention is starting to lose its edge - it is no longer a signal of a carefully crafted and highly intentional outreach.
In other words, Gen AI might make outbound sales even harder… With that said I still think AI outreach is destined to become the norm - it’s game theoretic - while you (a salesperson) may not get an advantage from using it, you might very well be at a significant disadvantage if you aren’t.
What will happen to sales?
The implications of this are profound for sales in an AI-first world. Traditionally, sales have always been a human-to-human enterprise, but this is bound to change now. We are already seeing the beginnings of AI-to-human interactions (which today feel fun and gimmicky). But as the technology evolves, will we soon see AI-to-AI sales motions? Put differently, will each buyer and seller have an AI agent representing their very best interests? If so, how much agency and decision making power would we endow these agents with? Would the sales AI agent be able to “trick” the buyer AI agent? Will there be ads? Or maybe all this technology will simply revive the value of in-person events and place an additional premium on the old-fashioned deal making at the golf course?
Life is going to get weird.
Conclusion
The future of selling will most certainly involve augmented intelligence, but the actual sales workflows will likely require continual rewriting as technology evolves. As each new strategy gets effectively arbitraged, human ingenuity will have to find new ways to reach and target prospective buyers - it is in our society’s capitalist DNA. One thing is for certain - salespeople who choose not to pay attention to AI and its evolving capabilities will definitely be left behind by their competition who do.
As always, all thoughts / pushback welcome. Twitter DMs always open @leveredvlad
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Interesting insight, and makes me think about where else we will see AI transform a process where human's once could distinguish themselves by putting in effort into one that is commoditized. Hopefully newletters aren't next!